Engage Reports Strong Growth in Fiscal 2000 First Quarter

Business Wire, Dec 8, 1999

ANDOVER, Mass.--(BUSINESS WIRE)--Dec. 8, 1999--

Engage Knowledge customers showing demonstrable results

Study results find profile based targeting beats content

based targeting by nearly 50%

Engage Technologies, Inc. (Nasdaq: ENGA), a provider of profile driven Internet marketing solutions and services and a majority-owned operating company of CMGI, Inc. (Nasdaq: CMGI), today announced operating and financial results for its fiscal first quarter ended October 31, 1999.

Total revenues for the fiscal 2000 first quarter were $8.3 million, a 423% increase from last year's first quarter and an 18% sequential increase over the fiscal 1999 fourth quarter revenues of $7.0 million. Net loss for the first quarter decreased to $10.5 million, or $0.22 per share, compared to a net loss of $10.8 million, or $0.26 per share, in last year's fourth quarter.

Engage continued to make significant progress in obtaining new customers and enhancing the breadth and depth of the Engage Knowledge database, which became commercially available late in July. Some key achievements for the quarter include:

- The addition of 35 new customers, including AltaVista,

Insight Express/NFO Worldwide (NYSE: NFO), FasTV, and CyBuy,

bringing the total customer base to 370. The Company also

increased its international customer base to 52, up from 43

in the previous quarter.

- The increase of Engage Knowledge customers to 53, up

from 34 in the fiscal 1999 fourth quarter. Of the Engage

Knowledge customers, 19 had installed the necessary software

and were actively contributing data, representing

approximately 900 contributing sites, up from 408 last

quarter.

- The number of anonymous online behavioral based profiles

in the Engage Knowledge database increased to 42 million, up

from 35 million at fiscal 1999 year end.

- The October launch of Engage AudienceNet, the first Web-

wide profile driven advertising and marketing network that

uses anonymous, behavior based profiles to deliver

substantial benefits to media buyers, Web sites and ad

networks alike. By the end of October, Engage had run 28

campaigns.

- The number of participating Web sites for Engage

AudienceNet was approximately 400. This number is

anticipated to grow with the addition of such customers as

Flycast, to over 2,000 sites.

Paul Schaut, President and Chief Executive Officer, commented, "Profile driven marketing is quickly emerging as a preferred solution for online marketers, as evidenced by Engage's rapid market expansion. During the quarter, we experienced strong customer growth and continued to enhance the quality of the Engage Knowledge database. In addition, we continued to execute on our business strategy through the signing of a definitive agreement to acquire AdKnowledge, the signing of strategic partnerships with leaders like IONA Technologies (Nasdaq: IONA), Atex Media Solutions, and BPA Interactive, and the addition of major new customers. Equally important are the introductions of new services, such as Engage AudienceNet, and in the first part of the second quarter, I/PRO's Velocity. We intend to continue taking initiatives that position the Company for accelerated growth and further increase the utilization and effectiveness of Engage's profile driven Internet marketing solutions."

AdKnowledge on Track

In September, Engage announced a definitive agreement to acquire AdKnowledge Inc., a leading provider of Web marketing management services focused entirely on the needs of online marketers and agencies. AdKnowledge will provide Engage with a leading presence on the "buy-side" of the market and the ability to build upon AdKnowledge's strong relationships with large, influential advertisers and agencies.

Mr. Schaut commented, "We believe that the combination of Engage's profiling solutions with AdKnowledge's technology and services will help improve the overall results of online marketing campaigns for publishers, e-merchants and agencies. We look forward to capitalizing on the synergy of the two companies and creating added value for our customers and shareholders."

The Company finalized the first step of its AdKnowledge acquisition, and has exercised management control of AdKnowledge since November 30 when CMGI acquired control of AdKnowledge through the issuance of CMGI common stock. The second step of the acquisition is expected to close on schedule later this month with a contribution of AdKnowledge shares held by CMGI and certain AdKnowledge shareholders to Engage in exchange for Engage common stock. Upon completion of the transaction, AdKnowledge will be a wholly-owned subsidiary of Engage. The transaction, which will be accounted for as a purchase, is subject to certain conditions including that Engage's stockholders approve the issuance of shares of Engage's common stock to CMGI.

IPSOS-ASI Profiling Study

Engage also continued to conduct a customer research study in conjunction with IPSOS - ASI, a leading international research group, which compared the effectiveness of profile based advertising to area content-based advertising. To date, the cumulative results from these tests indicate that by using Engage profiles to target advertising on a run-of-site buy, click through rates are directionally better than a targeted-content buy. For example, the study indicates that profile based advertisements achieve a 47.6% greater click through rate than those advertisements targeted by content.